Proposal to deregulate land prices

Update:
April, 09/2012 - 10:57

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HA NOI — The Government has approved a proposal by the ministries of Finance and Natural Resources and Environment to reform out-of-date land price structures and bring them more into conformity with market values.

The proposal will require final approval by the National Assembly, as land uses are governed by the Land Law.

Under the law, as amended in 2003, the Government sets a general land price framework for every city and province nationwide. Based on the framework, municipal and provincial People's Committees are authorised to decide land prices within their jurisdictions, but the prices may not exceed ceiling price set in within the Government's land price framework by over 20 per cent.

However, due to the out-of-date land price framework, a square metre of urban land in Ha Noi and HCM City is currently not allowed to exceed VND81 million (US$3,850), equal to only 30-60 per cent of the actual market value of the land, said the director of the Ministry of Finance's public asset management department, Pham Dinh Cuong.

The situation was costing huge losses to the State budget in terms of land use fee revenue and was contributing to a rise in legal wrangling related land clearance and settlement, Cuong said.

After removing the current framework, the Government proposal would regulate only methods and principles for determining land values while local People's Committees would set prices based on market principles. Higher values would result in higher land use revenues to the State Budget and would also allow authorities to pay higher settlements to persons whose land use rights were revoked, Cuong said.

He said that the ministry had also proposed that the Government take measures to hasten land clearance processes, promote land auctions and ensure greater transparency in the allocation of land use rights. — VNS